Refinancing your home simply means to renegotiate your current home loans terms to a lower interest rate through the same or a new lender.
Homeowners decide to refinance their mortgage for various reasons
- to take advantage of lower interest rates
- to consolidate high-interest debt
- to attain cash from the equity in their home
- HARP (Home Affordable Refinance Program) – call a local office near you to find out details of this special refinance program
The decision whether or not to refinance depends on several factors, including:
The type of loan you have
If you have an Adjustable Mortgage Rate (ARM) that is about to adjust to a variable rate, you might want to get a fixed rate loan to keep your mortgage payments from rising.
The costs associated with obtaining a new mortgage
There are closing costs and fees associated with refinancing your mortgage, including Origination charges such as application, title search, appraisal, closing costs, title or escrow fees. These can be tax deductible – consult with a tax advisor before you decide to use this option.